Hello everyone. I wanted to know if my client has taken a car in his daughters name and can show that he is maintaining the car for her by using it for company purposes and paying the EMI's and also some rent to his daughter. Is this expense allowed under Business and profession? what section should i refer to?
3 Replies
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 12 June 2012
There is a case law related to it, which states that, it is the use of vehicle which is to be seen and not ownership. Please google it.
Although, you may have to prove that vehicle is used by business.
Also, the allowed expense will be rent only and that also upto the reasonable limit. You won't be entitled for claiming EMIs as deduction.
CA Abhishek Pal
(Accounts Executive)
(81 Points)
Replied 12 June 2012
In your case, car shall be deemed as taken for lease purpose by company, so these expenses shall be allowed in Business & Profession head.
But amount paid for rent to daughter by the company shall be taken under lease expense.
EMI paid by company on behalf of client`s daughter shall not be treated business expenses.
CA Abhishek Pal
(Accounts Executive)
(81 Points)
Replied 12 June 2012
In your case, car shall be deemed as taken for lease purpose by company, so these expenses shall be allowed in Business & Profession head.
But amount paid for rent to daughter by the company shall be taken under lease expense.
EMI paid by company on behalf of client`s daughter shall not be treated business expenses.
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